PLEASE NOTE:
- This assignment is to assess the second semester of AFE4005-B.
- The maximum word count for this assignment is 1500 excluding references.
- This assignment accounts for 100% of the grades in the second semester
and 50% of the overall grades on the module AFE4005-B. - Please attempt all questions clearly showing all workings where needed.
- Please be aware that your work will be submitted through Turnitin. You
must only submit your own work including correct citations and references
for any external materials used in your work. - You must use Arial font size 12 with double line spacing.
- You must use Harvard (Brad) referencing style; for further details see:
https://www.bradford.ac.uk/library/find-out-about/referencing/referencing/ - The University policy on cheating, collusion and plagiarism will be applied
to this piece of work. For more details, please refer:
https://www.bradford.ac.uk/library/find-out-about/plagiarism/
AFE4005-B ITA SEM2 CW MAIN 2021-22
Question 1 (Total 40 marks)
Green Co. has three production departments Fern, Forest, and Moss and one service
department Shade. Green Co. is preparing its annual budget for the final quarter of - Planned overhead costs for the quarter are as follows:
Overheads £
Allocated overheads 40,500
Supervision 14,400
Plant Depreciation 20,000
Machine Insurance 6,000
Rates and Rent 46,000
The following information is available for each department:
Departmental details Fern Forest Moss Shade
Allocated overhead 11,000 16,500 9,500 3,500
Machine Value (£) 5,000 2,500 3,500 1,500
Budgeted Direct Labour hours 1,200 600 1,800
Floor Area Occupied (Sq.metres) 3,000 800 1000 200
Number of employees 700 400 40 80
Plant at cost (£000) 1,845 852 61 142
Of the total overhead costs allocated to the service department Shade, 20% is
charged to Forest and the remainder is charged equally to the other two
production department.
a) Prepare an overhead analysis sheet showing the total overhead cost
budgeted for all four departments. You must show all your workings
clearly.
(20 marks)
b) Allocate the services department Shade’s costs to all production
departments. (5 marks)
c) Critically discuss the issues that fixed, variable and semi-variable
costs can have on decisions that the management of a company must
make regarding the pricing of their products.
Note: You must use the relevant academic literature and relevant practical
examples or case studies to answer this question and include references
appropriately as an evidence of your wider reading and research.
(15 marks)
(Total 40 marks)
AFE4005-B ITA SEM2 CW MAIN 2021-22
Question 2 (Total 60 marks)
BRADFORD Ltd is starting up a new business on 1 January 20X0 and has provided
you with the following information:
£
Quarterly Utilities (payment due in March & June) 12,000
Cash outlay on equipment (payable in February) 150,000
Monthly planned purchases of stock for re-sale are:
January 30,000
February 34,000
March
April to June (per month)
45,000
12,000
All stock is bought on two month’s credit
Monthly planned sales are:
January 25,000
February 65,000
March
April
May
June
35,000
60,000
35,000
38,000